THIS week's Federal Court decision explaining why the Australian Competition and Consumer Commission lost its port privatisation case swung on one point of law.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
It's this: that the Competition and Consumer Act only applies to governments if they are carrying on a business. If they are not carrying on a business, then the relevant sections of the Act do not apply.
This was known long before the ACCC took up its case, and was one of the reasons it was hesitant to do so. But the more it examined the situation, the more convinced it became of the need to act.
It got together with the Port of Newcastle - as the decision reveals - and decided to prosecute its case.
We've known since June 29 that Justice Jayne Jagot found against the ACCC, and the decision published on Tuesday goes through the events of the time in forensic detail.
IN THE NEWS:
- NSW COVID cases: 136 cases today as restrictions change to stem exposure sites
- Lake Macquarie yacht drug bust: two men sentenced for 991-kilogram methamphetamine bust
- Newcastle court hears scaffolder threatened to kill notorious developer Daniel Roberts in dispute over $64,000
- Brawl in the boardroom as besieged Newcastle C&S Cricket board refuses to go
- Knights to sign Souths centre Dane Gagai for the next 3 years
But the question I find myself asking - and I know I'm not the only one - is that if the government wasn't "carrying on a business", then what was it doing?
The ports didn't stop operating, and the government didn't disappear. The answer, though, is that it wasn't carrying out a business.
It was making - or carrying out - a policy.
In Justice Jagot's words: "Contrary to the ACCC's submissions, the State did not decide to privatise the two ports [Botany and Port Kembla] in carrying on the businesses of operating those ports or the Port of Newcastle. It decided to privatise the ports as a matter of government policy."
I'm not sure what the practical difference is between the two: where a policy starts and a business stops.
But I do know that had Justice Jagot found the other way, the judgement would have been quite different.
Or maybe not. Because Justice Jagot then pulled Newcastle's container terminal plans to pieces, and found them wanting.
This led to the quotes, quickly highlighted by the Botany/Kembla operator NSW Ports, that hopes of a Newcastle container terminal were "speculative" and "a mere mirage".
On my reading of it, I don't think that's the case.
Unfortunately, the most redacted section of the judgement concerns a Preliminary Business Case that has involved the spending of millions of dollars, as the decision notes.
Money you wouldn't spend if you didn't think it would lead anywhere.
As an aside, I think it's worth pointing out that when ACCC chair Rod Sims got his head around what had happened with Newcastle, he spoke out to ensure the same thing didn't happen in Melbourne, when the Victorian government followed suit soon after to flog the port down there.
Victoria still privatised with restrictions - but they were debated in parliament and put into legislation, unlike in NSW, where they were done confidentially and denied until someone leaked me the paperwork, which we published in 2016.
Victoria still got good money, but the handcuffs down there are for 15 years, not Newcastle's 50.
Justice Jagot's decision points out, quite rightly, that the Newcastle syndicate knew what it was getting into when it bought the port lease for 98 years, complete with the half-century container handcuffs.
But they are not just handcuffs on a business.
They are a handcuff on the Hunter Region and its economy.
The container terminal site - which takes up a good two-thirds of the old BHP steelworks site - has been described as the most important vacant deepwater frontage on the Australian east coast.
I first wrote of the terminal plans in 1997.
They were conceived by BHP as a "parting gift" to Newcastle as it said goodbye to the city after 84 years of steelmaking.
Various versions of the container terminal have come and gone since then, including one proposed by PoN's forerunner, the state-owned Newcastle Port Corporation, which had been negotiating with a small consortium, Mayfield Development Corporation, and its chief executive, Captain Richard Setchell, ex P&O.
Interestingly, Setchell's partner in Mayfield has been taken over by the global shipping giant Maersk.
Mayfield's negotiations are covered at length in the judgement, although it was not a party to the case.
It does have a separate but similar matter listed with the same court, and we'll know soon enough what it intends to do.
Ditto for the ACCC. Its lawyers will be poring over the decision.
But it does not exist in a vacuum.
As fiercely independent as he is, Mr Sims and his team answer, ultimately, to the federal government.
Prime Minister Scott Morrison made encouraging sounds about the terminal on a recent visit before the verdict was known, but the NSW Coalition has made it crystal clear it wants the lid nailed shut on the box.
If Justice Jagot's decision is as watertight as it is ferocious, then the ACCC will have to cop it on the chin.
But that can't be the end of it. Hunter MP Joel Fitzgibbon recently described the Botany deal as a protection racket, and he's right. It's not just the owners of the port who cop it, it's the entire Hunter region.
If our coal loaders are stranded by a coal collapse, a once mighty port will become a country river with two grain terminals and a yacht club.
The two portable wharf cranes announced yesterday are a sideshow.
As long as Newcastle doesn't have Botany-style "portainer" gantry cranes, the handcuffs remain.
Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content:
- Bookmark: newcastleherald.com.au
- Download our app
- Make sure you are signed up for our breaking and regular headlines newsletters
- Follow us on Twitter
- Follow us on Instagram
- Follow us on Google News